September 23, 2014

The Disciple Consulting Group: Latest Free Advice for IndyCar

The internet is filled with self-appointed television executives that nearly continuously try to analyze 12+ overnight television estimates from Nielsen, and almost always reach a conclusion that any and all of these overnight estimates portend certain doom for IndyCar. Never mind that not one of them has ever actually seen numbers used in the actual commerce of television advertising sales, and if they had would not be able to formulate one coherent thought about their application in the real world.

While their approach remains comical as they openly and repeatedly make fools of themselves the one point that has merit is that over-the-air television ratings are lower than they were twenty years ago. This is often positioned by the ignorant as somehow unique to IndyCar. Again, laughter ensues. The real question that should be asked involves how much time and effort should be specifically focused on increasing ratings on ABC and NBCSN. My insider opinion is that they could assemble a team of the most knowledgeable television folks on earth to do nothing but make ratings go up and the numbers would stay about where they are.

Television ratings will not increase because an organization specifically sets out to get them to rise. We have already seen the hocus pocus happy talk about compressed schedules and time slots, and despite self-congratulatory back pats by those who believed their actions correlated directly into slightly higher numbers the approach remains shortsighted. The ITEs will drone on obsessively refuting increases; e.g., NBCSN has more households now, etc., but they always miss the point anyway.

I envision IMS doing three things that will cause over-the-air television ratings to grow organically without specific focus on ratings:

Figure out a way to make the cast of characters and the cars they drive more interesting to the casual public. IndyCar personalities have been sanitized to white bread levels. The cars, other than paint jobs and two engine badges, are identical. And there are far too few of them. Leverage any/all of the good ideas that exist to broaden those horizons. When Formula E goes belly up acquire those assets and run it as a support series at every IndyCar event.

Take the Indianapolis or Long Beach experience to every venue at which IndyCar runs. Having attended many races again this year the most accurate words that can be used to describe IndyCars outside Indy are underwhelming and uninspired, and embarrassingly so. The 500 mile races at Pocono and Fontana were particularly egregious in the ‘phone it in’ department. Promote THREE distinct ‘triple crowns.’ $3 million for a single winner of Indy, Pocono and Fontana (the ‘500 mile’ triple crown). $3 million for a single winner of Long Beach, Texas and either Barber or Mid-Ohio (the ‘diversity’ triple crown) and $3 million for a single winner of three foreign events (the ‘worldwide’ triple crown). It is far easier to work toward filling up seats at tracks than setting out to get television ratings to rise. Filling up the seats means more interest at the fan level, and more interest at the fan level leads to higher television ratings.

IMS/IndyCar is sitting on over a century of the recorded history of the sport. Rather than allowing video and audio content to decompose in vaults why not monetize and exploit it? IMS Productions has done great work in the past. Creative minds should be able to craft and package a century of content into enough content to support a channel.

IndyCar should start its own network. Not an over-the-air network. An over-the-top network that leverages the length and breadth of all digital platforms, from Kindles to gaming systems. The OTT network should be subscriber based with limited free content as promotion. If only diehards paid $6.95 per month the 100,000 who would subscribe would gross $8,340,000.00 annually. Imagine driving subscription numbers to 200,000, half a million or even a million over time. Add in revenue from ad sales and merchandising and goals of 15 to 20 million within a few years is possible, particularly given availability across the globe. It is doubtful selling DVDs in the gift shop or online comes close to that number, and an IndyCar TV network could serve as an effective storefront.

Mark Miles and cronies should drop in on the WWE folks in Stamford for inspiration. WWE, led by Vince McMahon, has acquired virtually the entire recorded history of professional wrestling in America. Their own OTT network features all live events across the country as well as carefully packaged and themed recorded content. The ITEs will no doubt stumble over themselves to point out that WWE’s OTT network is losing money, which misses the point as usual. IndyCar demographics are different than those of the WWE, and IndyCar still has two national television deals.

Programming an IndyCar channel with themed and packaged programming gleaned from the vaults along with live events, re-airs, retrospectives, highlight shows, new shows featuring personalities, technical aspects, etc., would be cost-effective (they already have the infrastructure) and a great way to grow the sport. An ‘Indy 500 Of The Day’ program would not have to be repeated for months. Add the capability for subscribers to access on demand content and ‘IndyCar TV’ becomes a worthwhile venture.

The entire point is getting the content out there. Content availability means potential eyeballs, and eyeballs equal new fans. Getting them to pay attention to the sport and attend the races means television ratings will rise on their own with minimal effort. The past can be the gateway to the future, and the future should be embraced.

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I agree with just about everything you say, except this statement: “If only diehards paid $6.95 per month the 100,000 who would subscribe would yield $8,340,000.00 annually.” From my experience, IndyCar folks are plain cheap! They talk a good game, but when it comes to opening the wallets, I’d be very surprised if there were 100K people who would pay $6.95 a month for that content.Editor’s Note: Good point. Creatively packaged deals might work. Above all it is imperative to get the content out there and charge people to watch.

People laughed when The Golf Channel burst upon the scene. Now, it gets all of the early rounds at most of the PGA tour events. I for one would be happy to pay an annual fee for IndyCar TV, but then I’m not one of the folks that need to be sold on the sport, since I’ve seen it through the past 50 odd years. Particularly as it pertains to ovals, the series should be running at least three “ladder” events at every venue. Do that, and you’ve immediately offered the potential fan a Hell of a lot more bang for the buck than just a Saturday qualifying /Sunday race for the Verizon series only. As I’ve said often, if you DO that, you’re going to have more young drivers getting used to oval racing before they’re thrust into it in the “big ” series.

100,000 subscribers? They’d be fortunate to get (and retain) 1,000. Very, very fortunate, especially given the declining attendance and popularity of the sport. Would enjoy having access to historical indy car content but, as a commercial and promotional venture, it would have extremely limited impact.Editor’s Note: Got any metrics to support your position, or are you merely basing your opinion on subjective whimsy? Considering the infrastructure and content is in place, and given the technical ability of selected partners is it not worth a shot?

Metrics? Fewer than 10% of the indy 500 viewing audience tunes in for any other race, so the erosion of customers is quite significant. As such, only about 350,000 tune in to any race, and they do so without any pay per view charge. Suggesting that nearly a third of those people would pay $80+ a year to watch historical footage of Indy and other related content is crazy (forget about 200,000 or 500,000 or 1,000,000 or more). In a sport where demand for the product is in decline, there is absolutely no chance people will do what you’ve suggested. Any business professional with experience in sales, marketing and promotion will tell you the same. Presumably, however, you have metrics that support your estimates, so please share them and the methodology behind the collection and analysis of your data, which must be extensive. Thanks.Editor’s Note: So your quaint supposition is that the potential market for subscribers is limited to roughly the same audience as an average non-Indy 500 race as derived from a 12+ overnight estimate, and that only a fraction of that number might be willing to pay less than the average cost of an Indy 500 ticket to enjoy 100+ years of creatively packaged content available 24/7/365. Spoken like a true ITE. If one buys into the theory that the sport is in decline and uses 12+ overnight estimates as the basis for supposition you could have a point. But what we do not have is the easy ability watch historic (and contemporary) content for free or not. Oh sure there are youtube clips out there but that is hardly an engrossing experience. I do not claim to have metrics to support my own opinion, which remains only that such an idea is worthy of consideration. Business professionals with experience in sales, marketing and promotion tend to espouse concepts that are proven to have worked years ago, but those folks you mention tend to not to be forward looking. I do have some experience in subscription based services. People have been dismissing Sirius XM for years, for example. If you figure their 25 million current subscribers pay 6.95 per month that generates about 2 billion annually. The problem with that entity is that the infrastructure is prohibitively expensive. Any idea how much it costs just to launch and maintain one satellite? How about 5 of them? And they do not stay up there forever. IMS, on the other hand, already has a highly regarded content generation entity. IMS does not need to own or lease satellites. IMS owns or has access to the entire recorded history of the sport. Does it not make sense to exploit that heavily for profit? In short, perhaps forward looking visionaries should take a look. It can’t hurt and won’t cost millions for advice such as ‘don’t try to compete to with the NFL.’

There’s nothing quaint about utilizing data as a primary basis for deciding whether a venture such as the one you’ve proposed is viable. It is, in fact, fundamental to not only a specific project like your’s but also the much larger issue of why the sport continues to decline. At any rate, suggesting that 100,000 or 200,000 or 1,000,000 would subscribe is wholly unsupported.Editor’s Note: And, as indicated previously, it is a venture worthy of investigation. They won’t make much money selling trinkets and DVDs. The world has evolved beyond that.

Interesting, however, that you raise Sirius and XM. As a charter subscriber (XM), I recall quite well how both firms continually tossed out unrealistic subscriber estimates while simultaneously being swallowed by their considerable expense and delivery issues. Only a combination (which faced anti-trust scrutiny) staved off bankruptcy and the failure of one or both entities. Those of us who were able to acquire shares for pennies were rewarded, but it was only because of demand for the product. There is no evidence that such demand exists for the indy car content you believe could be sold to subscribers. In fact, there’s no evidence that demand exists if it were provided free of charge.Editor’s Note: No one will know conclusively, however, until the parameters and potential are examined.

And there is no evidence indy car could perfect a reliable delivery system for such a product given their struggles to maintain the modest website they have now. Obviously, there would be costs associated with initiating such a service. What do you estimate those to be? How would you package the product? How would it be updated? What does the inventory consist of? Plenty of questions before determining whether it can’t hurt to embark on such a venture.Editor’s Note: IMS Productions is widely regarded for their work not only in racing but in a lot of other areas. They have that infrastructure in place. IMS also owns the majority of potential content. IMS also has technical partners with the ability to provide the necessary technical expertise, including cost estimation. They should follow the lead of WWE and repackage content thematically. Bake in sellable inventory for advertisers to increase revenue opportunity. I have offered my free content. Should they want to do a deep dive they should hire me or another competent professional to walk through it. I would cut them a great deal.

How well are the old Indy 500’s and other Indycar races saved on film? I was shocked to hear that most MLB World Series game TV broadcasts before 1970 have been lost. They happened to find a film of the 1960 World series game 7 broadcast because Bing Crosby, who was a part owner of the Pirates, had a copy made off of his TV because he was away in Europe. One of the greatest World Series games of all time, and in a fairly modern era, and this was the only copy, found nearly 50 years after the fact.

I would love to be able to watch old Indy 500’s. Loved the Phoenix 150 back in the early 70’s and would love to watch some of the old races again. I just wonder if USAC and CART did a better job of saving their big races on film than MLB did? I just missed the era of the classic roadsters and would love to watch an entire race from around that era (1960 or so).Editor’s Note: Hopefully they are as meticulous about maintaining the video record as they are the photographic record.

“indy car should start its own network.” I took this to mean you believed it merited more than just an “examination”.Editor’s Note: Well, one does not just start a network. It takes planning, content and resources. A business plan. Better late than never, IMHO.

Have you spoken with them / formally proposed such a venture? What was their response?Editor’s Note: Not officially. Too busy earning a living helping other national entities navigate those waters. But I’m always willing to offer my services.

Still trying to understand on what basis you’ve made your prediction that 100,000 (initially) would subscribe, followed by far bigger numbers. Can only presume you have data to support these estimates.Editor’s Note: You are trying way too hard to concoct a notion of words you think I said from words I actually did write. This is a phenomenon that seems to exist only in your mind (and perhaps a couple of others of your species). When I use words such as ‘if’ when beginning a sentence, it becomes a stretch for you to make some leap into the realm of ‘prediction.’ There is no OTT network, I have not done research on behalf of IMS, and given the proclivity of the management there to remain conservatively stationary in terms of advancement they may well be the last entity on earth to embrace such an idea. I do know from participating in recently completed market research at IMS that fans who could be considered ‘diehards’ actually exceed 100,000. Given the demographics and income levels of that group (believe it or not the overwhelming majority, as in 99+%, are not unemployed basement dwellers squatting on the internet) my speculation (again, not a prediction) is that a certain percentage of diehards (and probably others) would subscribe, particularly if annual deals or incentives (like tickets to races outside Indy) were offered. Driving subscriptions to and beyond 100K would also require marketing, which despite the fact Miles employs Ford and NASCAR veterans in such positions they seem only interested in the dissemination of business speak instead of actually marketing. But I digress. Bottom line: Learn the difference between intelligent speculation versus outright prediction.